(Jennifer Abel @ ConsumerAffairs) There’s a common saying about social media and other Internet companies: “If you’re not paying them anything, you’re not their customer; you’re what they’re selling.”So if you use web-based email or Facebook or Google or other free sites — you pay nothing to use them, so how do these companies make money? Through advertising, of course, and media companies that sell advertising space are basically selling an audience of potential buyers.
With that in mind, check out a complaint filed with the FTC by Consumer Watchdog, a California non-profit organization, complaining about what it says is deception in Google Shopping results.
Unfair and deceptive
John M. Simpson
“The way that the Internet giant is featuring results from Google Shopping without making it clear that the highlighted results are nothing more than advertisements for merchants who bid for placement is an unfair and deceptive act, violating Section 5 of the Federal Trade Commission Act," said John Simpson, CW’s Privacy Project Director. "Moreover, consumers are actually being harmed because the featured results from Google Shopping more often than not return higher prices than can be found elsewhere, when consumers would reasonably expect Google’s suggestions to be the best.”
Hmm. Reading that made us recall a story we published last month about rent-to-own or lease-to-buy stores; the gist of the piece is that you should avoid such businesses, because they sell furniture and appliances for much higher prices than ordinary retail stores. To demonstrate, we chose certain items and did price comparisons between the rental centers and various retail outlets, and said this: “We searched online for that make and model of television, and one of the first websites that came up is Kohl’s (which is not remotely the cheapest store we could find).”
We used Google to do that search, so we can say from our own experience: if you use Google to look for a smart TV, the first results will not offer the lowest prices.
However, Consumer Watchdog’s complaint is not based on any idea that Google is somehow obligated to prioritize its search results based on price. Instead, CW said this:
“Google’s presentation of the Google Shopping results disguises the fact that the results are in fact advertisements. Clicking on any one of the Google Shopping suggestions takes the user directly to the merchant’s page where the product can be purchased … Each suggestion is nothing more than an advertisement, however, there is no label that makes this clear. The omission of an ad label is even more egregious when the Google Shopping results are presented surrounded by results that are marked as ads. Thus, the consumer can only conclude that the Google Shopping results are suggestions, not advertisements.”
A similar analysis from the Financial Timesshowed that “five out of every six items highlighted on a Google search are more expensive than the same items from other merchants hidden deeper in the Google Shopping service.”
Think of these results as yet another reminder why savvy consumers should never assume the first price they see is the best one.
